Nasdaq-listed Macau VIP gaming room promoter Asia Entertainment & Resources Ltd. (AERL) reported rolling chip turnover of $1.33b in the month of June, a 3% drop from the same month last year. Win rate was 3.09%, slightly above the normalized range. News of the 3% drop has likely sent champagne corks a-popping around AERL headquarters, as the past year has routinely seen double-digit drops in monthly turnover. AERL has been struggling ever since its mid-2012 decision to tighten credit to junket agents in response to signals that China’s economy was slowing.

For the first half of 2013, AERL’s turnover is down 15% year-on-year to $8.54b while Macau’s overall gaming revenue rose 15% during the same period. AERL also announced it has completed its acquisition of 100% of the profit interest of the VIP gaming room at Le Royal Arc Casino, which operates under an SJM Holdings concession. The room’s six tables bring AERL’s total Macau presence to 40 tables across five gaming rooms.

HAVING NO LUCK WITH THE GREEKS, AMAX TALKS TURKEY Meanwhile, Hong Kong-listed junket operator Amax Holdings has taken steps to boost its presence outside Macau. On June 28, Amax signed a non-legally binding letter of intent to acquire 51% of Southern Ruby Limited, which has two memorandums of understanding to obtain an exclusive right to operate a casino in the Lara Park Hotel in the town of Gime (aka Kyrenia) in the Turkish Republic of Northern Cyprus. Amax didn’t disclose what a 51% stake in this proposed casino might cost the company, but chairman Ng Man Sun said the deal was meant “to diversify our income stream and to expand our gaming business.”

That Amax would seek to diversify its business is understandable. Last month, Amax warned that it would likely post a loss when it revealed its earnings for the year ending March 31, compared to the HKD 161.1m (US $20.8m) profit it earned the previous year. The source of Amax’s woes can be traced back to the Greek Mythology Casino, the SJM Holdings-licensed gaming joint in which Amax holds a 24.8% stake. That investment hit the skids when SJM decided to transfer 40 of the Greek’s gaming tables to another SJM casino, effectively gutting what had been Amax’s only profitable venture.

Since that decision, Amax has been unsuccessfully trying to (a) convince Macau authorities to compel SJM to offer them compensation and (b) convince Greek Mythology to hand over financial data so that Amax can file a proper financial report card. Amax’s inability to incorporate this data into its report has led to two auditors refusing to sign off on Amax’s reports and the latest chairman of Amax’s audit committee resigned in March after just six months on the job. Undeterred, last month Amax placed 9.6m new shares on the Hong Kong market, representing 4.42% of its issued share capital, for which it received HKD 7.85m ($1m).

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